Justia Class Action Opinion Summaries

Plaintiff sued under the Fair Labor Standards Act of 1938 (FLSA) on behalf of herself and “other employees similarly situated,” 29 U. S. C. 216(b). She ignored an offer of judgment under Federal Rule of Civil Procedure 68. The district court, finding that no other individuals had joined her suit and that the Rule 68 offer fully satisfied her claim, dismissed for lack of subject-matter jurisdiction. The Third Circuit reversed, reasoning that allowing defendants to “pick off” named plaintiffs before certification with calculated Rule 68 offers would frustrate the goals of collective actions. The Supreme Court reversed. Because plaintiff had no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness, her suit was appropriately dismissed. The Court assumed, without deciding, that the offer mooted her individual claim. Plaintiff had not yet moved for “conditional certification” when her claim became moot, nor had the court anticipatorily ruled on any such request. The Court noted that a putative class acquires an independent legal status once it is certified under Rule 23, but, under the FLSA, “conditional certification” does not produce a class with an independent legal status, or join additional parties to the action. View "Genesis HealthCare Corp. v. Symczyk" on Justia Law

The District of Columbia appealed from the structural injunction entered by the district court in this class action challenging the policies and practices of the District's "Child Find" system under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq. The court vacated the order certifying the class, and consequently, the orders finding liability and ordering relief to that class. The court remanded the case to the district court for reconsideration of whether a class, classes, or subclasses may be certified, and if so, thereafter to redetermine liability and appropriate relief. View "DL, et al v. DC, et al" on Justia Law

Plaintiffs, former employees of brokerage firms, filed four class actions challenging California's forced-patronage statute, section 450(a) of the California Labor Code. At issue was whether federal securities law preempted the enforcement of California's forced-patronage statute against brokerage houses that forbid their employees from opening outside trading accounts. The court affirmed the judgment and concluded that the district court correctly determined that the Securities Exchange Act of 1934, 15 U.S.C. 78o(g), and related self-regulatory organizations (SROs) rules preempted plaintiffs' forced-patronage suits. View "McDaniel, et al v. Wells Fargo Investments, LLC, et al" on Justia Law

Appellant, a former TWL employee, commenced a class action adversary proceeding within TWL's bankruptcy suit, alleging violations of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101-2109. The district court affirmed the bankruptcy court's order denying appellant's related motion for class certification and dismissed the adversary proceeding. Because the reasons for the bankruptcy court's order were unclear, the court vacated in toto the orders and remanded to the district court to remand to the bankruptcy court for reconsideration. The court expressed no view as to the outcome the bankruptcy court should reach on remand in reconsidering appellant's motion for reclassification and the Trustee's motion to dismiss the adversary proceeding. View "Teta v. TWL Corp., et al" on Justia Law

Former employees of AK Steel filed a class action under the Employee Retirement Income Security Act (ERISA), including claims for a “whipsaw” calculation of their benefits from a pension plan in which they participated before terminating their employment. The employees were originally involved in a related class action that included identical claims against the same defendants, but were excluded from that litigation due to their execution of a severance agreement and release that each of them signed during the that litigation. The district court ruled in favor of the employees. The Sixth Circuit reversed an award of prejudgment interest for failure to consider case-specific factors, but otherwise affirmed denial of a motion to dismiss; class certification; and partial summary judgment on liability. The employees’s future pension claims were not released as a matter of law because the whipsaw claims had not accrued at the time of the execution of the severance agreements and because the scope of the contracts did not relate to future ERISA claims. View "Schumacher v. AK Steel Corp." on Justia Law

Comcast and its subsidiaries allegedly “cluster” cable television operations within a region by swapping their systems outside the region for competitor systems inside the region. Plaintiffs filed a class-action antitrust suit, claiming that Comcast’s strategy lessens competition and leads to supra-competitive prices. The district court required them to show that the antitrust impact of the violation could be proved at trial through evidence common to the class and that damages were measurable on a classwide basis through a “common methodology.” The court accepted only one of four proposed theories of antitrust impact: that Comcast’s actions lessened competition from “overbuilders,” i.e., companies that build competing networks in areas where an incumbent cable company already operates. It certified the class, finding that the damages from overbuilder deterrence could be calculated on a classwide basis, even though plaintiffs’ expert acknowledged that his regression model did not isolate damages resulting from any one of the theories. In affirming, the Third Circuit refused to consider Comcast’s argument that the model failed to attribute damages to overbuilder deterrence because doing so would require reaching the merits of claims at the class certification stage. The Supreme Court reversed: the class action was improperly certified under Rule 23(b)(3). The Third Circuit deviated from precedent in refusing to entertain arguments against a damages model that bore on the propriety of class certification. Under the proper standard for evaluating certification, plaintiffs’ model falls far short of establishing that damages can be measured classwide. The figure plaintiffs’ expert used was calculated assuming the validity of all four theories of antitrust impact initially advanced. Because the model cannot bridge the differences between supra-competitive prices in general and supra¬competitive prices attributable to overbuilder deterrence, Rule 23(b)(3) cannot authorize treating subscribers in the Philadelphia cluster as members of a single class. View "Comcast Corp. v. Behrend" on Justia Law

Plaintiffs filed a class action on behalf of stock purchasers, alleging that Boeing committed securities fraud under the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), and SEC Rule 10b-5. The suit related to statements concerning the new 787-8 Dreamliner, which had not yet flown, and did not specify a damages figure. At argument the plaintiffs’ lawyer indicated that the class was seeking hundreds of millions of dollars. The district court dismissed the suit under Rule 12(b)(6) before deciding whether to certify a class. Plaintiffs appealed the dismissal; Boeing cross-appealed denial of sanctions on the plaintiffs’ lawyers for violating Fed. R. Civ. P. 11. The Seventh Circuit affirmed dismissal with prejudice, but remanded for consideration under 15 U.S.C. 78u-4(c)(1), (2), of Rule 11 sanctions on the plaintiffs’ lawyers. No one who made optimistic public statements about the timing of the first flight knew that their optimism was unfounded; there is no securities fraud by hindsight. Plaintiffs’ lawyers had made confident assurances in their complaints about a confidential source, their only barrier to dismissal of their suit, even though none of them had spoken to the source and their investigator had acknowledged that she could not verify what he had told her. View "City of Livonia Emps' Ret. Sys. v. Boeing Co." on Justia Law

Companies underwriting workers’ compensation insurance participate in a reinsurance pool administered by the National Workers Compensation Reinsurance Association. Insurers share in the pool’s profit or loss according to the volume of business they underwrite. When the pool is profitable, it is beneficial to have a larger book of business; when the pool loses money, a smaller book means that the underwriter needs to contribute less toward the losses. The class contends that AIG underreported the size of its business in losing years, causing the pool’s other members to bear a disproportionate share of the losses and sought$3.1 billion. Some of the insurers had independent claims against AIG. AIG advanced its own claims against Liberty Mutual. The district judge approved a settlement. Liberty Mutual appealed, arguing that its share would not compensate it adequately for its stand-alone claims against AIG and that the conflicts of interest within the reinsurance pool meant that the case never should have been certified as a class. After argument, Liberty Mutual settled with AIG. The Seventh Circuit dismissed the appeal, holding that the settlement does not jeopardize the interests of the unrepresented class members. View "Am. Int'l Grp. v. Liberty Mut. Ins. Co" on Justia Law

Goldman Sachs appealed from an order of the district court denying their motion to compel arbitration of plaintiff's claims of gender discrimination. Plaintiff and others alleged that Goldman Sachs engaged in a continuing pattern and practice of discrimination based on sex against female employees in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000 et seq., and the New York City Human Rights Law, Administrative Code of the City of New York 8-107 et seq. On appeal, plaintiff contended that the arbitration clause in her agreement must be invalidated because arbitration would preclude her from vindicating a statutory right. The court disagreed and held that the district court erred in denying the motion to compel arbitration where plaintiff had no substantive statutory right to pursue a pattern-or-practice claim. Accordingly, the court reversed the judgment of the district court. View "Parisi v. Goldman, Sachs & Co." on Justia Law

The Class Action Fairness Act of 2005 (CAFA) gives federal district courts original jurisdiction over class actions if the matter in controversy exceeds $5 million, 28 U.S.C. 1332(d)(2),(5), and provides that to determine whether a matter exceeds that amount the “claims of the individual class members must be aggregated.” When Knowles filed a proposed class action in Arkansas state court against Standard Fire Insurance, he stipulated that he and the class would seek less than $5 million in damages. Following removal, the district court remanded to state court, concluding that the amount in controversy fell below the CAFA threshold in light of Knowles’ stipulation, although the amount would have fallen above the threshold absent the stipulation. The Eighth Circuit declined to hear an appeal. The Supreme Court vacated and remanded. Knowles’ stipulation does not defeat federal jurisdiction under CAFA. The stipulation does not speak for those Knowles purports to represent; a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified. CAFA does not forbid a federal court to consider the possibility that a nonbinding, amount-limiting, stipulation may not survive the class certification process. The Court noted CAFA’s objective: ensuring “Federal court consideration of interstate cases of national importance.” View "Standard Fire Ins. Co. v. Knowles" on Justia Law